ND JUL
20 19 SIT EC y POL
ND denounce Global-neoliberal
debacle y propone State-Social + Capit-compet in Eco
ZERO HEDGE ECONOMICS
Neoliberal globalization is
over. Financiers know it, they documented with graphics
Decades of
central bank intervention have left us with an unavoidable insolvency crisis...
Here we stand today with the
national debt at over $22 trillion, total US debt outstanding of $70 trillion
(shown the below chart), and unfunded national liabilities of over $200
trillion. And we add to this every year with an annual deficit now exceeding $1
trillion.
See Chart:
This
gigantic accretion of debt will never be repaid. And as the pile grows
higher, the burden of servicing it — even at today’s historically low interest
rates — is placing an increasingly heavy drag on economic growth.
To date, the central banks have
gotten away with their easy money policies because they could. The day of
reckoning could always be pushed further out via a fresh round of liquidity.
But, as Brien Lundin says in the video below, the reckoning is “no longer
simply inevitable, it is imminent. We are reaching the
End of the Road.”
LISTEN VIDEO: https://youtu.be/XGx5_jDXUJM
….
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The credibility and independence of
central banks is in retreat; volatility continually surprised to the downside
this decade; but in the next decade inflation-targeting, MMT, debt forgiveness
and acceleration of populism will coincide with higher volatility and lower
returns.
After countless weeks of equity
outflows, last week, when the S&P hit a new all time high above 3,000,
skeptical investors capitulated and decided to buy stocks at the highest possible
level ever, injecting $6.2bn into equities this week, alongside the now
traditional fixed income tide, which last week amounted to $12.1 billion into
bonds. As a result, the constant hemorrhaging at equity funds - which have seen
$151BN in redemptions in H1'19 - finally stopped, and in
the past 6 weeks there has been $11bn in inflows (although it is worth noting
that inflows are exclusively to US equity funds, to the tune of $22bn past 6
weeks).
Still, when it comes to flows, it is all about BONDS, and as BofA's Michael Hartnett writes,
the most important flow to know is that of annualized
inflows to bond funds, where there now is a staggering record $455 BN in
2019...
See Chart:
Positiong
danger is in bonds, nor stocks or commodities
A more
grandular look reveals frothy inflows to virtually every asset class, including
government bond, IG, HY, and EM debt funds, all coinciding with…
- renewed global monetary ease (18 rate cuts past 6-mths & 720 cuts since Lehman);
- record $12.9tn of bonds in developed markets with negative yield (25% of total);
- record 26% of Euro IG corporate bonds with negative yield;
- record 56% share of global equity market cap from tech-heavy US stock market;
- extreme relative valuation of "growth" stocks versus "value" stocks, e.g. US growth & EAFE value have price-to-book ratios of 7.7x & 1.1x, and dividend yields of 0.9% & 4.8% respectively.
Meanwhile
as a result of schizophrenic investor sentiment, the relative bull trend in
assets which promise "yield" and "growth" has become more
and more extreme as central bank capitulation to Wall Street deepens in
2019.
See Chart:
S&P
vs. 10Y Yield
Of course, this won't be a
happy ending as it is impossible for both to be right,
and while stocks will eventually be in a world of pain, for now Bank of
America remains tactically bullish equities as the BofAML Bull & Bear Indicator
is 3, as consensus remains more bearish than bullish;
Furthermore, the Fed wants to steepen yield curve and weaken the US
dollar, which will require 50bps cut July 31st
although as the Fed made clear on Friday, that is not happening, no matter what
SF Fed president John Williams says; Additionally,
BofA is bullish as it now expects Chinese monetary and UK/European fiscal
easing (especially with BREXIT in Oct) likely H2; while credit spreads continue to indicate that recession and/or policy impotence
is not an immediate threats to Wall St & corporates.
See Chart:
Central
Banks has flipped from hawkish to dovish past 12 months
Which brings us to three
specific contrarian trades that BofA CIO Michael Hartnett recommends to
clients, which are as follows:
1. The contrarian positioning trade: With $254bn into bonds YTD and $144bn out of
equities, the contrarian
trade is long stocks, short bonds via long EM stocks, short HY bonds (Chart 5 shows great entry level
over past 20 years)…yields in equity market looking more and more attractive
relative to yields in fixed income…2363/2847 MSCI ACWI stocks have DY>0.56%
(Chart 4, avg yield for US, UK, Japan, Swiss, German, Aussie, Canadian govt
bonds)…US DY 50bp above 10-year Treasury yield, in
Europe 400bp above 10-year bunds.
See Charts:
2. The
contrarian profit trade: with global manufacturing unambiguously in recession
(global PMIs have contracted for 2 consecutive months, US yield curve has
inverted, 12-month consensus global EPS forecasts now negative) the contrarian trade is long
cyclical value, short defensive growth via long TRAN, short UTIL or long EU
large cap value, short US mid-cap growth to play "soft
landing" in Q3… The key drivers are either bold policy moves (Fed
cuts 50bps, China cuts 50bps, European fiscal easing) which
steepen yield curves & weaken US dollar, or commodity markets indicating an
inflection point in the global manufacturing cycle (e.g. CRB METL index moves
above 850-900 - Chart 6).
See Chart:
Commodities the “tell” for infection
point in global PMIs
3. The contrarian policy trade: long
silver, long US banks, short US$, short EU bonds & credit…
- if Fed cuts 50bps + July payroll >300k…Fed dovish policy mistake which will provoke either disorderly rise in government bond yields (1994 analog) or melt-up in stocks; and...
- if Fed cuts + July payroll -150k…signals onset of recession & policy impotence… sparks disorderly rise in corporate bond spreads & decline in US dollar.
See
Chart 7
Contrarian Policy trade… long
silver.. short NASDAG
BOTTOM LINE FROM
HARTNETT: slowly but surely the
credibility and independence of central banks is in retreat; volatility
continually surprised to the downside this decade; but... in the next
decade inflation-targeting, MMT, debt forgiveness and acceleration of populism
is likely to coincide with higher volatility and lower returns on Wall St.
Enjoy it while it lasts.
….
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Today’s looming fiscal mess is the predictable consequence of politicians’ ability to spend today and tostick our children and grandchildren with the
bill...
[[
Here only exstracts, go to the source at the bottom to read the full article]]
Who bears the burden
of government indebtedness? Prior to the Keynesian revolution in
the mid-20th century, most economists understood that the burden of government
(or “public”) debt falls on those citizens who, in the future, must repay the
debt. The funds for such repayment can come in the future from higher taxes,
from reduced government expenditures on programs other than debt servicing, or
from some combination of the two.
But Keynesianism destroyed this consensus. According
to what my late Nobel-laureate colleague James Buchanan called
the “new orthodoxy” about government debt, all
such debt that is owed to fellow citizens - that is, debt that “we owe to
ourselves” - is no burden at all upon the generations who must service and
repay it.
Three Prongs of the Keynesian Orthodoxy
There are three prongs to this
Keynesian orthodoxy.
The first prong is rooted in the Keynesian
insistence that the main driver of economic activity is the volume of total
spending, or what economists call “aggregate demand.”
The second prong of the Keynesian orthodoxy is that the burden on society of government debt is shouldered at
each of the moments when programs that are funded with debt are undertaken.
The third prong is that government deficit financing imposes no burden -
none! - at any time at all, on anyone at all, when it is done during periods of
Unemployment.
Keynesians believe that during recessions lunches
really are free.
DEBT FINANCING BY GOVERNMENT IMPOSES BURDENS ON FUTURE GENERATIONS
It’s true, of course, that when
government borrows money to build fighter jets today it diverts resources away
from the production of other goods and services. But - and here’s Buchanan’s
key insight - the creditors who today lend money to the government do so voluntarily
And so while these creditors do indeed reduce their
ability to consume goods and services today, their expectation of higher future
consumption makes this sacrifice, for them, worthwhile. These creditors, as such, thus are clearly not
the people who pay for the fighter jets. These creditors do not bear the burden
of supplying government with these new military weapons.
Buchanan noted that
future-generations’ bearing of the burden of government debt does not
necessarily mean that debt financing was a bad deal for these taxpayers. It’s
possible for the government to spend its borrowed funds in ways that taxpayers
in the future find to be worth the higher tax bill. If the borrowed funds are
indeed spent in this prudent manner, then the debt financing is economically
justified.
But Buchanan also showed that
this possibility is not a probability. The reason was nicely summarized by the
Royal Swedish Academy of Sciences in its
announcement of Buchanan’s Nobel Prize: “He showed how debt financing dissolves the
relation between expenditures and taxes in the decision-making process.”
In effect, debt financing
allows government to spend money today while foisting the tab on future
taxpayers – many of whom, literally, aren’t yet born. Politicians eager to win votes are
thus prone to borrow and spend excessively because
borrowing allows the current generation to free-ride on the incomes of future
generations.
Unfortunately, too few people bother to think
carefully through the economics of
government taxing, spending, and borrowing decisions, yet everyone can
easily see the programs funded with today’s expenditures.
Today’s
looming fiscal mess is the predictable
consequence of politicians’ ability to spend today and to stick our children
and grandchildren with the bill.
….
SOURCE: https://www.zerohedge.com/news/2019-07-20/burden-government-debt-and-james-buchanans-corrective
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Goldman analysts pored over 4,000
earnings and conference calls transcripts in the past year to figure out why
business sentiment was declining despite "record" corporate profits.
This is what they found.
See Chart:
See more charts
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The gap between systematic (robots)
and discretionary (humans) equity positioning is among the widest it has ever
been.
See Chart 10:
Systematic
strategies Equitiy Positioning vs. S&P500
There is
a bad news for the overall market, because
systematic strategy exposure is already at the top of its historical range, suggesting limited room to raise it any
further and offset cuts by discretionary investors. And since the biggest signal for systematic
positioning is volatility - usually in circular fashion as the lower VIX drops,
the higher the market rises, and so on - any
upcoming increase in volatility will prompt a reduction in exposure,
especially for vol control funds, which in turn will exacerbate a sell-off in
equities, which are already being sold by discretionary investors.
Finally,
besides a vol shock should the VIX spike higher forcing quants to
delever and puke their holdings, how else can this
unprecedented divergence converge? According to DB, risks in the near
term include earnings season disappointments and
potentially a re-escalation of the trade conflict as has often followed “record
highs” and a ramp up of pressure on the Fed.
See
more charts at
….
SOURCE:
https://www.zerohedge.com/news/2019-07-20/unprecedented-market-divergence-robots-are-all-humans-flee
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US DOMESTIC POLITICS
Seudo democ duopolico in US is
obsolete; it’s full of frauds & corruption. Urge cambio
“The rich are building bunkers. Entrepreneurs
are actually buying abandoned missile siloes with armed guards and steel
doors... every one of them that I
have spoken to have gold, physical gold...”
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Where are the bunkers for 99% of the Nation.. Billonaires are fostering wars abroad &
promote the building of Nukes + other.. when war come.. they hide
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La corrupción del modelo neoliberal emana por
todos los poros del sistema
Cornell professor Dave Collum sounds
off on Jeffrey Epstein, Pizzagate, 9/11, the Las Vegas shooting, the Fed,
JFK and big pharma.
….
De milagro NO figura alli Trump.. o se ‘olvidaron’ de ponerlo
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The coming art is apparently a
defense of Trump.. from PCR.. incredible I said. BUT it is not .. it’s a
condemnation of current system of power.. starting with the judiciary.. here “the power rule doesn’t belong to Law, the Constitution or
the people” said PCR at the end. SO, no se trata de salvar a Trump, se trata de crear
un Nuevo sistema de poder.
"In
other words, the Federal Judge has
ruled that Mueller has made a false indictment. If that is not a felony,
it should be..."
The Mueller report, which had no choice as there was
no evidence, but to clear Donald
Trump of conspiring with Russian President Putin to steal the last US
presidential election from Hillary Clinton, nevertheless managed to keep an aspect of the
manufactured hoax known as “Russiagate” alive by
indicting some Russian intelligence officers and a Russian Internet click bait
operation for attempting to discredit Hillary with Internet postings.
How did a person as corrupt as Robert Mueller get confirmed
in his appointments as US Attorney, US Assistant Attorney General, US Deputy
Attorney General, and Director of the FBI? That a person as ethically-challenged as Robert
Mueller could breeze through so many confirmations by the
US Senate proves how utterly corrupt the US government is.
See Ben Garrison pictures on
this regard:
Pictures:
Before long, the only words you will hear will be
those used to control you. The word freedom will be redefined as per
George Orwell’s 1984 or be prohibited.
The judiciary no longer has the independence
that the separation of powers provides. Judges can be
punished if they rule against the interests of those in whom the predominance
of power resides.
THOSE WITH THE PREDOMINANCE OF POWER RULE, not the
law, the Constitution, or the people.
THEN: No se trata de salvar a Trump, se trata de crear un Nuevo
sistema de poder.
….
SOURCE: https://www.zerohedge.com/news/2019-07-20/mueller-should-be-arrested-conspiracy-overthrow-potus-pcr
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"They
don’t seem to understand that the
State isn’t a cornucopia. It’s the opposite. It’s a dangerous parasite. A huge tapeworm in
the body of society..."
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US-WORLD ISSUES (Geo Econ, Geo Pol & global Wars)
Global depression is on…China,
RU, Iran search for State socialis+K-, D rest in limbo
Iran has aired dramatic footage of
yesterday's raid on the British-flagged tanker Stena Impero.
….
El
estrecho de Ormus pertenece al Persian gulf. Se requiere permiso Internacional y
OR el de Irán para cruzarlo. Que los BRITs envíen tropas allí es un suicidio.. por NO decir estupidez..
Iran puede derribar su crucero y sus aviones y eso iniciaría el WW3: por la
imprudencia matonesca de los British. Si es lo que quieren los del UK, el
próximo paso de Iran seria el ataque directo a los bancos de Londres y a las
bases militares del UK. Si los Iranios no alcanzan a derribar el 2do poder
imperial del sistema Penta-NATO.. la ayuda de los RU y Chinos, solucionaría el
problema. Al parecer ya está en camino dicha ayuda. Por lo pronto se agregó
Iran al sistema automático de respuesta nuclear. Si el UK se atreve a
bombardear Iran.. adiós a los residuos del viejo imperio ya caduco.. se irían
al infierno a olerle los pedos a la reina.. cuyo cuerpo huele a muerto ya podrido.. tan maloliente como el viejo
imperio del UK. Vaya final.. imagino que
esa reina habría preferido las guillotinas de Robespiere en Francia y no un
bombazo a su edificio en Londres. LEA Guillotina - Wikipedia, la enciclopedia libre
https://es.wikipedia.org/wiki/Guillotina
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Nobody wants to be on that
confrontational course.
====
A Babylonian clay tablet helped
unlock an understanding for how
our ancestors saw the world...
====
SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars
& danger of WW3
- Iran
'at Forefront of Resisting US': Zarif Blames Washington for Unilateralism, Nuke
Deal Collapse
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NOTICIAS
IN SPANISH
Lat Am search f alternatives to
neo-fascist regimes & terrorist imperial chaos
- FOTO: Londres afirma que un buque de guerra trató de impedir que Irán incautara su petrolero pero llegó 10 minutos tarde
- El Pentágono advierte del alto riesgo de "un conflicto involuntario" con Irán
- Vicecanciller ruso: "Сontra el Gobierno legítimo de Venezuela se ha desatado el terror económico"
- Bolsonaro sobre la deforestación de la Amazonía: "Es mentira"
- UK: Las fuerzas iraníes que incautaron al petrolero se le aproximaron en aguas de Omán
- Abren osarios en el Vaticano buscando a una menor desaparecida y hallan miles de huesos
- Twitter suspende cuentas de tres agencias de noticias iraníes tras la incautación del petrolero británico
- Volvo retira más de 500.000 autos en todo el mundo
- Irán muestra el momento exacto de la incautación del petrolero británico con helicópteros y lanchas rápidas
- Keiser Report "La actitud de Trump frente al bitcóin podría ser la gran metedura de pata por la que podría ceder el cargo en el 2020"
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GLOBAL
RESEARCH
Geopolitics & Econ-Pol
crisis that leads to more business-wars from US-NATO allies
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PRESS
TV
Resume of Global News described
by Iranian observers..
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